US: Greencore acquires sandwich and sushi firm HC Schau
- Greencore expands food-to-go footprint
- Transaction value US$17.3m, plus performance bonus
Irish food group Greencore has acquired US food-to-go manufacturer HC Schau & Son for US$17.3m, plus a further performance related payment of "up to" $2m.
The firm produces sandwiches, sushi and entrees sold through retail and convenience and foodservice customers. During 2011, Schau booked revenues of $32m, Greencore revealed.
Greencore has looked to strengthen its presence in the US food-to-go market and strengthen its relationship with leading customers - notably convenience chain 7-Eleven - through M&A. To this end, Greencore completed the acquisition of Marketfare Foods in April.
For an in-depth interview with Greencore CFO Alan Williams on the acquisition and the company's strategy and plans for the US, click here.
GREENCORE ANNOUNCES A FURTHER PLATFORM ACQUISITION IN THE US
TO SUPPORT NEW BUSINESS WIN IN FOOD TO GO
Greencore today announces that it has acquired H.C. Schau & Son, Inc. ("Schau"), a fresh food manufacturer with facilities in Chicago, Illinois and Jacksonville, Florida (the "Acquisition"). The Acquisition will form a critical part of the supply network for a significant new multi-regional contract gain in Food to Go with a national food service chain.
Schau is a producer of fresh sandwiches and sushi as well as fresh entrees and other ready to eat items, sold through both the convenience store and grocery retail channels. It has an established modern facility in Chicago and a new high quality start-up facility in Jacksonville. For the year ended December 2011, it had revenues of $32m (£20.5m).
The Acquisition provides the capability and capacity to drive growth in the US, both with existing customers and with the recent new business win. It will build on the acquisition of Marketfare Foods in April 2012 by adding scale with 7-Eleven, to whom Schau is a long-term supplier in the Chicago region. In addition, Greencore has put in place a multi-year partnership with the new customer to supply its stores with approximately $50m of Food to Go products on the east coast and in the mid-west from four of Greencore's facilities. The delivery of this new business will be phased in between September 2012 and March 2013.
Under the terms of the Acquisition, Greencore will pay upfront cash consideration of $13.0m (£8.3m) plus deferred cash consideration of $4.3m (£2.8m). An additional cash amount of up to $2.0m (£1.3m) will be payable dependent on certain performance conditions. The transaction will be funded from existing debt facilities and will have a minimal impact on the Group's leverage. It is expected to be modestly earnings accretive from the first year of ownership. Integration and transaction expenses are estimated at $2.5m (£1.6m) and will be treated as an exceptional item.
Commenting on the news, Patrick Coveney, CEO of Greencore, said: "Schau, along with Marketfare, will allow us to take a strong step forward in executing the next stage of our US strategy. Greencore now has a Food to Go platform in the US that will not only enable us to better serve our existing customers, but also to support what is a significant and exciting new business opportunity."
Original source: Greencore
US c-store retailer 7-Eleven has acquired more stores, this time adding to its business in North Carolina....
- Premier Foods CEO expects UK supermarket rebound
- Unilever must "speed" response to consumer trends
- Briefing: The risks and rewards of e-tail in China
- Why US diet guidelines should consider environment
- Emerging markets online: India's food retail scene
- Post Holdings strikes deal to acquire MOM Brands
- Food industry news of week: Unilever, PepsiCo
- Tootsie Roll CEO Melvin Gordon dies at 95
- Chobani launches Tots infant range
- Monde Nissin "to acquire Menora"
- 10 Key Trends in Food, Health and Nutrition 2015
- The Sugar Backlash and its Effects on Global Consumer Markets
- The Future of Retailing in the UK to 2017
- Global Consumer Trend Framework: Understanding Attitudes and Behaviors that Influence Global Consumption Habits
- Meat Substitutes Market - Global Trends, Forecasts up to 2019